Coke versus Pepsi—one of the most popular rivalries in modern pop culture history. These two companies have been locked in an intense competition since the 1970s and 1980s when the term "cola wars" was derived. That's around the same time Pepsi came up with the Pepsi Taste Challenge, where marketers asked people to determine which brand they preferred in blind taste tests.

Both companies have a long history of delivering thirst-quenching drinks to consumers, as well as sweet returns for their investors. Read on to find out more about each company as well as their financials.

Key Takeaways

  • Coke and Pepsi have long been brand-name rivals in the soft drink industry - but they also compete for investors by paying handsome dividends.
  • Coca-Cola increased its dividend for 57 consecutive years, now paying roughly a 3.5% yield.
  • For 2020, Pepsi declared an annual dividend of $3.82 per share, the same level it paid in 2019, and around a 3% dividend yield.

Coca-Cola History

Coca-Cola held its initial public offering (IPO) in 1919 with the help of an underwriter, the Trust Company of Georgia, which is now known as SunTrust Banks. In expanding, it has stuck strictly to beverage buys, scooping up Costa Coffee, Minute Maid, and Honest Tea, among other brands.

Coca-Cola first traded under the symbol CCO but replaced it in 1923 with the current symbol, KO.

It is no surprise the world's largest beverage company offers hefty dividends and is part of that exclusive group of stocks known as dividend aristocrats. To be considered a dividend aristocrat, a company must have a managed dividend policy that has increased its dividend payout for at least 25 consecutive years. The company first raised its dividend in 1963 and has continued to do so ever since.

Coca-Cola Performance 

The company announced in early 2020 it raised its dividend again, making it 57 consecutive years it has done so. Not surprisingly, that startling fact places it squarely in the list of so-called dividend aristocrats. 

The quarterly dividend announced by Coca-Cola in February 2019 was 40 cents a share. That represented a yield of about 3.41%, roughly double the average dividend paid by consumer goods stocks. For 2020, that quarterly dividend has increased to $0.41, or a 3.6% yield at current prices.

For 2019, Coca-Cola recorded $37.27 billion in revenue, with a market cap of around $195 billion as of May 2020.

Investors receive dividends in April, July, October, and December from Coca-Cola, while Pepsi pays investors dividends in January, March, June, and September.

Pepsi History

Pepsi (PEP), one of the Coca-Cola Company's main competitors, is also included in the coveted dividend aristocrats group.

It may get a little less credit than Coca-Cola in popular lore, but Pepsi has an equally colorful history. Invented in 1893 by a North Carolina druggist, it was originally called Brad's Drink. Its current name was adopted in 1898 and is a reference to the word dyspepsia, a common condition it was claimed Pepsi could cure.

If it hasn't out-sold Coke in the soft drinks category, Pepsi has competed strongly in its breadth of products—going beyond just soda pop. Throughout the years, it acquired brands including Frito-Lay, Gatorade, Quaker, and Tropicana.

Pepsi Dividend Policy Analysis

In 2019, the company declared a quarterly dividend of $0.0955, up slightly from its prior dividend of $0.9275 per share,. That's a yield of about 3.03%. Pepsi has paid dividends in every consecutive quarter since 1965. The dividend remains unchanged going in to 2020.

In 2019, Pepsi Co. earned more than $67 billion in global revenue, and as of May 2020, its shares indicate a market cap for the company of $180 billion.